On 27 November 2014, the EU General Court ("GC") handed down two separate judgments on the appeals by Alstom and its former subsidiary Areva T&D SA ("Areva"; currently Alstom Grid SAS) against the European Commission's decision in the power transformers cartel case. The GC annulled the decision in so far as it concerned Alstom, but dismissed the appeal brought by Areva.

In 2009, the Commission imposed fines totalling over € 67.6 million on a number of European and Japanese companies for having participated in a market-sharing cartel that operated on the market for power transformers between June 1999 and May 2003 in breach of Article 101 TFEU and Article 53 of the EEA Agreement. Alstom was fined € 16.5 million and Areva was found to be jointly and severally liable for payment of over € 13.3 million of Alstom's fine (see VBB on Competition Law, Volume 2009, No. 10, available at www.vbb.com).

In its decision, the Commission found that Alstom exercised decisive influence over and was therefore liable for Areva based exclusively on the presumption of decisive influence of a parent company over its wholly-owned subsidiary. In its appeal, Alstom challenged that finding by arguing, inter alia, that the Commission had failed to adequately state the reasons why it had not successfully rebutted the presumption that it exercised decisive influence over its subsidiary. In its assessment, the GC sided with the applicant and criticised the Commission for hastily brushing aside all the arguments raised by Alstom in support of its claim, even though its arguments were not manifestly irrelevant or meaningless.

During the administrative procedure, Alstom had submitted detailed evidence showing that its subsidiaries behaved autonomously on the market, i.e., the subsidiaries were all responsible for, inter alia, their own accounts, sales objectives, sales costs and pricing policy; the group had been structured in such a way that Alstom was not kept informed of its subsidiaries' activities; Alstom had no involvement with the commercial policy of its subsidiaries considering its purpose was limited to holding and administrating its shareholders; Alstom only carried out an ex post audit of important financial agreements (and no audit in relation to projects concerning power transformers had occurred during the infringement period); the alleged infringement only involved the employees of the subsidiary; commercial strategy was defined by the subsidiary's directors; and Alstom's executive committee gave no instructions to its subsidiaries concerning the conduct they should follow on the market.

By not explaining why these arguments were not capable of rebutting the presumption of parental liability, the GC concluded that the Commission had breached its obligation to state reasons and that the decision should therefore be annulled in so far as it concerned Alstom. The GC rejected the Commission's argument that the GC, in the exercise of its unlimited jurisdiction, should nevertheless uphold the decision. The GC considered that its power of unlimited jurisdiction is limited to the assessment of the appropriateness of the level of the fine imposed and excludes any assessment concerning the legality of the decision (which was the subject of the Commission's request).

The GC also rejected the Commission's claim that the decision should be nevertheless upheld because the appellant could not legitimately rely on a claim for failure to state reasons to annul a decision when it is clear that, following its annulment, another, identical decision would be adopted. In that regard, the GC considered that, because the legal issue of whether Alstom's subsidiary behaved independently on the market is a complex one whose outcome cannot easily be predetermined, the Commission is not entitled to presume that an identical decision will be adopted against Alstom. As a result, the GC annulled the Commission decision in so far as it concerned Alstom.

In a separate judgment, the GC dismissed all the claims brought by Areva which challenged the Commission's decision denying it immunity from fines under the 2002 Leniency Notice following its leniency application of 22 September 2004. According to the GC, the Commission had previous indications that anti-competitive meetings between European and Japanese power transformer producers had occurred following inspections at the premises of Hitachi in May 2004 in the scope of different proceedings. The GC ruled that the Commission could legitimately rely on that information to order further inspections, which it did in 2007. The GC also noted that Hitachi filed for leniency prior to Areva (i.e., on 9 September 2004) and had provided the Commission with evidence of a cartel in the power transformer sector. Based on these elements, the GC ruled that the Commission was entitled to refuse Areva's immunity application but confirmed the finding that it was entitled to a fine reduction for cooperating in the investigation.

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